How AT&T Is Handling the Net Neutrality Debate

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On July 12, AT&T reaffirmed its support for net neutrality and the open internet. The move, timed to coincide with the internet “Day of Action” protests taking place around the nation, were intended to show Internet users that AT&T is firmly behind the development of a free, open internet.

Consider just some of the steps that AT&T took on July 12 – it displayed web banners articulating its support for an open internet. It sent messages to DirecTV users with the same message. And it gave internet users a very clear call-to-action: send a message to Congress to create lasting rules to make an open internet possible. And, to top it all off, AT&T linked to an “Open Internet” site on the company’s main website.

Why AT&T supports the open internet

There has been a common misconception in recent years that AT&T and other Internet Service Providers (ISPs) are not in support of an open internet. In fact, nothing could be further from the truth.

The open internet, as AT&T sees it, stands for several key principles, all of which are at the heart of the net neutrality debate:

  • Transparency in rules and pricing for customers
  • No blocking of Internet traffic
  • No censorship of Internet traffic
  • No discriminatory throttling of Internet traffic

All of these are principles that are also espoused by supporters of the open internet. That’s because they are all based around fundamental beliefs that most (if not all) American citizens have. These citizens don’t want companies trying to censor content, and they don’t want companies throttling or otherwise slowing down content that they don’t approve of or don’t support.

If you look at how the modern Internet has evolved, it’s clear that the key to innovation and competition is ensuring that traffic flows freely. Yet, the way that the internet is regulated is largely at odds with this vision of a free and open internet.

AT&T supports a new regulatory approach that favors innovation

The reason why AT&T has been so supportive of customers reaching out to their congressmen and congresswomen about the open internet is because the way the internet is regulated now is largely an anachronism. Congress has been looking for the right way to regulate companies like AT&T, and can’t find the right piece of legislation that will favor innovation and competition.

During the early 2000s, Congress settled on classifying Internet Service Providers (ISPs) under Title I of the Communications Act of 1934 as an “information service.” But then in the mid-2000s, the push was made to re-regulate ISPs under Title II of that same act, in which they would now be classified as “common carriers.”

You might think that switching from Title I to Title II wouldn’t be a big deal – but you’d be wrong. That’s because Title II was designed to regulate the original phone companies in America. As phone companies began to form and expand in America, there had to be some way to ensure that all communities could receive the same quality of phone service at an affordable price. It wouldn’t be fair, would it, if New Yorkers could make phone calls to each other at a certain level of quality, while those living in rural areas in America couldn’t?

And, in the minds of many people in Congress, the growth of the Internet resembles the growth of the phone companies. They envision wires and cables that the Internet Service Providers use to connect Internet service to your home, and that immediately reminds them of the wires and cables that the phone companies used to connect homes to phone networks. So they are adopting the same regulatory framework.

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What’s the best way to regulate companies like AT&T?

But is the Internet the same thing as your phone network? That’s hardly the case – think of all the things that you use the internet for – yes, you use it for communication purposes, but you also use it for other things, like entertainment or news or information. You can’t define what the Internet is because the uses for it keep changing. Who could have imagined streaming movies and TV shows over the internet even 20 years ago?

That’s why regulating AT&T under Title II of the Communications Act of 1934 seems so ridiculous. And so, on the “Day of Action” for the open internet on July 12, AT&T let that fact be known. One message that AT&T sent out to consumers simply read, “Make sure the internet isn’t subject to heavy-handed laws created for the rotary phone.”

So what are the other alternatives? Well, one suggestion that some have mentioned is Section 706 of the Telecommunications Act of 1996, which is much more up-to-date than the 1934 Communications Act, by more nearly 60 years. But it still dates back to 1996, during the early period of the Internet. Back then, Netflix hadn’t been invented yet. Facebook didn’t exist. There was no iPhone or iPad. So even that 1996 act might not be all that useful or effective.

There is one big advantage of the 1996 act over the 1934 act – and that’s the diminishment of the regulatory burden on companies like AT&T. Just one section of the 1934 act – Title II – runs to over 100 pages of rules and guidelines and regulations. That’s a lot! But compare that to Section 706 of the 1996 act – that’s only 2 paragraphs long!

And Section 706 specifically mentions the need to “promote competition” and “remove barriers to infrastructure.” Both of those are vital to today’s consumers. It means that they will have a choice of services in a very robust, very competitive marketplace. And it also means that companies like AT&T will have a much easier time deploying new, faster and more efficient broadband infrastructure. Everyone wins in this scenario.

So if any new legislation gets passed by Congress, it will almost certainly contain these two clauses – more competition and faster deployment. When AT&T talks about reducing the regulatory burden, it’s talking about moving from 100 pages of regulations to 2 paragraphs of regulations!

Title II is not the same thing as the open internet

The problem right now is that some people are trying to confuse the issue of Title II and the open internet. They see AT&T fighting against an old, obsolete and burdensome regulatory framework, and they assume that AT&T is fighting against an open internet.

But nothing could be further from the truth – AT&T has repeatedly laid out its support for all the most important principles of an open internet. And it has gone one step further by suggesting that the open internet be protected by a full and permanent law. Once net neutrality and the open internet are enshrined in law, it will be a lot harder for anyone to change it later. That’s going to benefit both AT&T and internet users, and is going to be one of those rare examples of a “win-win” in business.

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The fate of an open internet in a Trump administration

So why are we having this debate over the open internet now? The easiest answer is that the new Trump administration, which officially came into office in January 2017, has been signaling its support for changes to net neutrality.

If any changes are going to happen, they will start with the FCC, which now regulates the Internet. The current chairman of the FCC, Ajit Pai, is very much in favor of removing regulations and making it easier for companies like AT&T to invest in modern 5G infrastructure as well as create new innovative services for customers. From the perspective of the FCC, too much regulation is a bad thing for business, so it’s important to get rid of any unnecessary regulations.

That means that a decision about Title II could be coming soon. The FCC is very much in agreement with companies like AT&T that Title II doesn’t make sense. The FCC keeps asking the question: Why is Congress trying to regulate a modern technology company like AT&T the same way it regulates a phone monopoly? It just doesn’t make any sense.

Just keep in mind — if any change is forthcoming, it will meet a lot of resistance from people who are afraid that net neutrality is coming to an end. They will fear that the FCC is trying to end an open internet.

But, as we’ve seen above, that’s confusing the facts. All the FCC is trying to do is remove the burden from AT&T that’s keeping it from doing some really spectacular things with the Internet.

And AT&T is just trying to ensure that what it refers to as the “FCC merry-go-round” (the changes in FCC rules with every new administration) finally comes to a stop. AT&T doesn’t want to have to worry about the open internet with every new U.S. president – it wants the fundamental basis for an open internet to be set down in law so that it can move on to bigger things, like building a really cutting-edge broadband network for its customers.

Would AT&T support a compromise solution?

There is one other possible scenario in the net neutrality debate, and that’s moving regulation of the internet from the FCC to the FTC. That would be a recognition of the fact that ISPs should be regulated like all other commercial companies. That might be a way out of the impasse.

As companies like AT&T become even bigger, and as they get involved with even more kinds of services for customers, it’s clear that they can’t be treated as just “information services” or as just “communications companies.” It’s clear that a big company like AT&T, which recently acquired DIRECTV, is blurring the line between entertainment, communications and information. That should open up more opportunities for the further growth of the internet.

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Top 6 Developments in the Internet of Things to Expect In the Next Year

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By any standard, the Internet of Things is growing at a truly exponential rate – and shows no signs of slowing down anytime soon. According to some estimates, there are now more than 8.4 billion objects that are part of the Internet of Things. In other words, there are now more objects than humans connected to the Internet right now.

And, according to the research firm IDC, we’re now on pace to see even more dramatic growth in the Internet of Things (now commonly referred to as just IoT) in 2017 and beyond. IDC predicts that IoT spending will grow by 16.7% in 2017, to a figure of $800 billion. By 2021, total global spending on the Internet of Things could reach $1.4 trillion. So where exactly is all that spending headed?

If you think that the “Internet of Things” only refers to consumer technology and new entertainment options, you could be missing the bigger picture. Instead, as IDC points out, the biggest spending is in the area of manufacturing and freight monitoring. The second biggest area of spending is in smart buildings and smart grids. And the third biggest spending involves the smart home. And after that comes all the spending on the Internet of Things gadgets (like Internet-connected pillows and Internet-connected mirrors) that typically show up at trade shows like the CES in Las Vegas.

With that in mind, here’s a closer look at 6 top developments to watch out for in the Internet of Things over the next 12 months.

#1: Manufacturing and production asset management

The biggest spending on the Internet of Things is going to happen in manufacturing and production asset management. Imagine entire factories hooked up to the Internet, and every single pallet shipped in the world being tracked via the Internet. That would create some truly unique efficiencies in the way products are manufactured and shipped. It would enable just-in-time delivery anywhere in the world.

Here’s one way to think about this development: just think of the innovation that FedEx created when it made packages fully trackable anytime you ship in the world. For many younger Americans, that might seem to be a “given” – the ability to track in real-time where your package is in the world. But that’s really only a fairly new innovation. In the same way, you will soon be able to track any part, any asset or any manufacturing input in real-time. Farmers and ranchers are even connecting their livestock and cows to the Internet. The world is already massively interconnected by trade, and the Internet of Things is only going to push that trend forward.

#2: Smart grids

According to IDC, the Internet of Things is going to change the way energy is generated, distributed, consumed and stored. When it comes to energy generation, it is going to enable the optimization of uptime and output. The days of centralized energy generation are coming to an end, and all energy generation is going to be pushed to the “edges.”

In terms of distribution and usage, it will be possible to control not just a specific variable but also the total energy budget for the month. And when it comes to energy storage, this is going to lead to the creation of “smart grids” capable of storing power from alternative energy sources (like wind and solar energy) and then distributing it as needed to any part of the grid.

#3: Smart homes

For most average Americans, the way they will experience the Internet of Things in 2017 is via the smart home. The classic example is the “smart thermostat” like the Nest capable of controlling the temperature of a home. But there are plenty more innovations planned for the next 12 months, For example, at CES 2017 in Las Vegas, innovations included Internet-connected smoke detectors and Internet-connected blinds (MySmartBlinds). Imagine being able to control the opening and closing of the blinds on your windows to control for variables such as temperature and light!

And, within the home itself, we are starting to see more and more products that hint at the future of home furniture and interior furnishings. Everything, it seems, is soon going to be connected to the Internet. One example is the $259 Hi Mirror, a smart beauty mirror that you can hang in the hallway or in your bathroom. When you look into the mirror, a computer and camera connected to the Internet begins to analyze your face for wrinkles, blemishes, dark spots and pores. It can then analyze the data and give you a customized skin care regimen to fix any problems.

Or consider an innovation like the Smart Table. When you first look at it, it appears to be an ordinary wooden table. But it’s actually connected to the Internet, and enables activities like video calling and checking emails. Instead of making a Skype call from your phone, imagine making a new type of video call from your kitchen table!

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#4: Consumer gadgets

And, as might be expected, continue to look for new consumer gadgets that push the boundary on what we can expect from the Internet of Things. For example, at CES 2017, there were several innovations displayed that hint at just how ubiquitous the Internet of Things is becoming. There was the $129 Kolibree Ara Smart Toothbrush, capable of giving you feedback on your brushing techniques.

And there was the June Smart Oven, which literally uses the Internet to help you make dinner. Say, for example, you know that you are going to be home from work in 45 minutes and would like to have a nice, tasty dinner waiting for you when you arrive. Well, you could use your iPhone or iPad to control and program your oven, and then use that same digital device to watch a live videostream of your meal being prepared. And it could all be yours for the low, low price of $1495.

And, of course, personal health and fitness trackers continue to be popular. As they are connected to the Internet, they could make it possible for doctors to monitor your health in real-time, from any location in the world. Not only can you can check how many steps you’ve taken in a day, you’ll see all the key variables of your body’s health and learn how to optimize them.

#5: New security innovations

Of course, the downside of having billions of objects connected to the Internet of Things are the potential security and safety vulnerabilities. In October 2016, for example, there was a famous “botnet” attack, in which 10 million printers, DVRs, cable set-top boxes, webcams and baby monitors combined forces to crash the website of a single company responsible for Internet site performance. That, in turn, led to companies like Twitter, Amazon, PayPal, Spotify, Netflix and HBO temporarily being kicked off the Internet.

In a worst-case scenario, of course, an Internet of Things vulnerability could lead to more than just Netflix being unavailable for a few hours. Since we’ve already seen that the Internet of Things is leading to the creation of smart grids, it could be the case that a security glitch could knock down a city’s power grid. In one scenario outlined by security experts, a city’s traffic lights could be easily turned off.

And just think of what could happen if an Internet-powered medical device (like a pacemaker) is somehow made vulnerable – it could lead to some very tragic consequences. Thus, look for continued developments related to making the Internet of Things even safer in 2017.

#6: Consumer entertainment

Of course, the really fun area for the Internet of Things in 2017-2018 involves consumer entertainment. Internet-connected TVs and cloud DVRs are just the beginning, as consumer gadget makers figure out new ways to create revolutionary new experiences that combine digital entertainment programming with the Internet.

For example, consider what’s happening now with voice-activated assistants, such as Amazon Echo or Google Home. It’s now possible to give voice commands to an Internet-connected object in your home. With Amazon, for example, you can now order a pizza just by talking to your Amazon Echo. Or, you can control the music in your living room with the Echo. You can completely control your home entertainment experience just with your voice.

Conclusions

It’s clear that there are a lot of exciting developments ahead for the Internet of Things. While there are a lot of frivolous innovations being created – such as Internet-connected hairbrushes and Internet-connected silverware – there is actually a lot of innovation happening in areas like smart health and the smart home that impact everyone and every American household.

And, taking a bigger picture view of how the Internet has the potential to change the way businesses and cities are organized, it’s clear that the Internet of Things is no longer just a buzzword used by the techno elite. It’s part of the daily fabric of everyday life. Many of the innovations taking place in the Internet of Things – such as new smart grids, smart buildings, and smart manufacturing chains – may be largely invisible to the eye, but they are everywhere around you. Now that nearly 10 billion objects are connected to the Internet, it’s time to figure out how to use them most effectively.

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Why AT&T Won’t Regret Buying DIRECTV

Back in July 2015, AT&T completed its nearly $50 billion mega-acquisition of DIRECTV. It’s now been almost exactly two years since the deal was finalized, meaning it’s now possible to ascertain the real effect of the acquisition. Contrary to all the initial concerns about the deal – many of which focused on the potential anti-competitive effects – it now looks like the deal is really going to pay off for AT&T.

The worlds of entertainment, streaming, wireless and broadband Internet are starting to merge and consolidate in unimagined ways, and it looks like the real winners will be those mega-companies with both the reach and scale to survive in a hyper-competitive industry.

And when it comes to mammoth entertainment and technology giants, they don’t come much bigger than the combined AT&T and DIRECTV. The combined company now has a national footprint that reaches an estimated 26 million Americans. Moreover, the company reaches another 19 million customers in Latin America. The same company is now a behemoth that offers wireless, voice, data and TV – and that combination is going to make the DIRECTV a real winner. Here are a few reasons why…

Reason #1: AT&T is going to become the streaming TV leader

If there’s one core reason why AT&T was willing to pay such a hefty price tag for DIRECTV, it was to get access to DIRECTV’s 20 million customers nationwide. At the time of the merger, DIRECTV was the second-largest pay TV provider in the country and by far the largest satellite TV company in the country.

However, AT&T has a much bigger goal in mind than simply winning in the pay TV category – the company also wants to become the undisputed leader in streaming TV content, and now it looks like that goal is very much within reach.

The main way that AT&T plans to capture this market for streaming (not linear) TV programming is by continuing to market the DIRECTV Now offering, which launched with much fanfare at the end of 2016. At the time, DIRECTV came with promotional pricing of just $35 a month. The rumors and expectations were that DIRECTV would have to raise its pricing in 2017 to $40, $45 or $50 per month in order to become profitable. At that higher price point, it wouldn’t be nearly as competitive, especially with streaming TV entrants like Hulu stepping up their game.

But guess what? It’s now possible to get DIRECTV now for just $10 a month if you’re an AT&T wireless customer. The company is running a special promotion where you can stream live TV for just $10 a month if you have the Unlimited Choice plan. At $10 a month, DIRECTV Now would be the same price as Netflix ($9.99) and cheaper than just about any other streaming TV competitor.

Obviously, wireless is going to be the key to winning over the streaming TV customer, and that leads to the second major reason why AT&T isn’t going to regret buying DIRECTV.

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Reason #2: AT&T is going to grow its overall customer base

You can already start to see all the innovative offerings coming out of AT&T these days, and that can only mean one thing: AT&T is going to be able to win over new customers who are attracted by all the new bundling options.

Remember the days of the “Triple Play” for cable companies, in which they encouraged you to bundle Internet, TV and Voice? Well, that’s about to become the Quadruple Play, as they encourage you to bundle Internet, wireless, TV and data. The only thing is – AT&T isn’t going to make it so obvious that they’re bundling all this together. Customers are smart, and they won’t want to get locked in to a massive bundle if they don’t have to.

But the offers could just be so incredibly attractive that they won’t have any choice but to sign up as an AT&T customer. For example, consider HBO. That’s the one cable network property that customers HAVE to have. And AT&T is going to make it very easy to get it. Just check out the current AT&T website – one of their featured deals is the ability to get free HBO if you’re an AT&T customer. Yes, that’s free as in $0 per month.

If you had a choice between, say, Verizon and AT&T, which one would you pick? You’d obviously pick AT&T because you’d get free HBO bundled in. So you’d willingly cut your ties with Verizon (or Sprint or T-Mobile) and sign up for A&T.

What AT&T has recognized is that customers no longer differentiate between how they get content – all they care is that they get the right content at the right time. Thus, for an AT&T customer, it doesn’t matter if HBO is delivered over cable, satellite, wireless or high-speed internet – if they’re getting HBO, then they’re happy.

Reason #3: AT&T is going to boost its revenue per customer

And with so many customers signing up for AT&T service, that’s going to lead to another key competitive effect, and that’s the ability to boost its revenue per customer. In business jargon, it’s called the “up-sell.” It means migrating a customer to a higher price point or a higher overall bill. For a company, that’s a very easy way to grow the bottom line.

The way AT&T is going to up-sell its customers is the same way that McDonald’s up-sells its customers. When you check out at McDonald’s (or any other fast food outlet), the person at the cashier always asks a question like, “Would you like fries with that?” Sometimes they’ll ask, “Would you like to super-size that drink for just $0.25 more?” Or sometimes they’ll just rudely ask, “Is that all???” But the reason is always the same – to get the customer to pay a little more for a meal than they were originally intending to spend.
And that’s exactly what’s going to happen with AT&T. All of a sudden, DIRECTV is going to be the magic add-on that inflates the bill of every customer. An AT&T customer may be happily paying $100 or $150 a month for wireless service, and now comes a chance to “stream live TV for just $10 more per month.” See? It’s just like McDonald’s trying to up-sell you with a box of fries!

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Reason #4: AT&T is going to own the mobile video space

Right now, the #1 major trend in entertainment is the exponential growth in mobile video. Think about the type of content that you consume on your phone or tablet: chances are, it’s video. According to most estimates, we’ve already long reached a tipping point where video is the primary form of content on the Internet. By some estimates, Netflix accounts for the majority of that video content. But there’s also video content from the likes of YouTube. And, of course, Facebook is making a major push into video content.

So you can see AT&T’s major quandary here – the company has seen that its AT&T wireless offering is only as good as the type of mobile video that it can stream. And, again, that’s where DIRECTV comes into the picture. Literally.

But in this case, it’s not about distribution – it’s about content. Think of all the content deals that DIRECTV has signed with the major cable networks. DIRECTV needs all that content for its satellite TV offering, of course. But now AT&T also has access to all that content, in at least some form. And that’s preparing AT&T to become a mobile video behemoth.

Remember – AT&T has nearly 2,300 retail stores across the nation, and those become a powerful way to highlight the content options available at the company. Netflix may be a video giant, but it doesn’t have a brick-and-mortar presence. And, more importantly, Netflix is dependent on the major broadband providers. AT&T, in contrast, has a lot of power over both content and distribution.

TV Everywhere and Net Neutrality

Going forward, there are going to be several buzzwords that are going to define the future success of the AT&T and DIRECTV deal. One of them is “TV Everywhere,” or the concept that TV content should be available on any device across a wide range of platforms: wireless, satellite and cable broadband. As we’ve seen above, AT&T already has a very good TV Everywhere strategy in place.

The other big, important buzzword is “Net Neutrality.” As a huge behemoth with interests in wireless, satellite and cable, AT&T is going to come under a lot of scrutiny. But for now, it looks like AT&T is firmly on board with net neutrality. That means it won’t try to block or slow down the traffic of competitors, such as Netflix or Hulu.

But now it looks like that concern about net neutrality is a thing of the past. AT&T continues to roll out new offerings that make sense for the customer. And the combined AT&T/DIRECTV is at the forefront of so many important trends, such as the mobile video and streaming TV revolutions. Sure, there have been some glitches along the way – such as some concerns with the rollout of DIRECTV Now – but it looks like AT&T has been making all the necessary adjustments.

Years from now, the verdict will be clear — AT&T won’t regret buying DIRECTV. In fact, DIRECTV might be the big reason why AT&T will become the most innovative technology giant in the nation within just a few years.

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